Remodeling Market Index Hits Nine-Year High
Washington, DC, Oct. 25, 2013 -- The Remodeling Market Index continued to climb at a modest pace in the third quarter, rising two points to 57, the highest reading since the first quarter of 2004, according to the National Association of Home Builders.
An reading above 50 indicates that more remodelers report market activity is higher than report it is lower.
The overall index averages ratings of current remodeling activity with indicators of future remodeling activity. The current market conditions index rose from 54 in the previous quarter to 58, the highest reading since the creation of the RMI in 2001, driven partly by rising existing home sales.
“The growth in home equity and home sales prompted home owners to remodel as they prepare to move or undertake upgrades that they put off during tough times,” said NAHB Remodelers Chairman Bill Shaw, a remodeler from Houston.
All three major components of the RMI’s current market conditions index increased in the third quarter. Major additions and alterations increased from 51 to 55, minor additions and repairs from 55 to 58 and maintenance and repair from 57 to 59. The future market indicators component of the RMI remained even with the previous quarter reading of 56.
“In addition to existing home sales, which support remodeling activity as owners fix up their homes before and after a move, remodeling has benefitted from rising home values,” said NAHB Chief Economist David Crowe.
“This boosts home equity that owners can tap to finance remodeling projects. We expect existing home sales and house prices to increase, but at a slower rate over the next year, so the demand for remodeling services should also increase, but more gradually over that period.”